Question-and-Answer Session
Operator
The floor is now open for questions. (Operator Instructions) Your first question comes from David Kestenbaum of Morgan Joseph.
David B. Kestenbaum – Morgan Joseph
Follow up on the deal that you announced today. When you said $8 million EBITDA year one, is that calendar 2009? Is that the way to think about it or middle of this year onto middle of next year?
Howard Hochhauser
It’s a run rate estimate based upon the timing so it’s not 09. It’ll kick in once we close.
David B. Kestenbaum – Morgan Joseph
And are there synergies –
Howard Hochhauser
And just to be clear that’s for a 12-month period.
David B. Kestenbaum – Morgan Joseph
Are they synergies on top of that you’re going to be able to achieve through the deal
Susan M. Lyne
It’s a well run, lean company. That said, we’ve built a strong infrastructure here that we know we can leverage without any further investment so we do believe there is a greater revenue upside and EBITDA upside than a cost savings upside here. This is really about growing a business. All of his businesses are in exactly the same areas ours are, publishing, TV, Internet, licensing. We think there’s a big licensing opportunity here. He’s got some great ideas and we also think that there are ways to integrate Emeril into some of our own brands like Everyday Food that will actually allow us to take that magazine to a new level. So I think we’re looking at more revenue upside, that $8 million of EBITDA is based on his current operations, not on what we can add to that or bring to the party.
David B. Kestenbaum – Morgan Joseph
What kind of top-line -
Howard Hochhauser
David, you cut out. What’s up? Assuming you’re still healthy I think you were asking about the top line. On his cash basis numbers it’s about $14 million in top-line revenue for the prior year. That’s cash basis and not GAAP basis. Let’s go to the next question. I think he may have gotten disconnected.
Operator
Your next question comes from Michael Meltz of Bear Stearns.
Michael Meltz – Bear Stearns & Co.
On Emeril and then I have three follow ups. Can you give us a sense of the employment contract that you expect to accompany this deal?
Howard Hochhauser
Yes, there’s two important points to look at. One is the earn out is 2011 and 2012 which takes this deal out, it gets some teeth into the future. As it relates to Emeril specifically he has signed a 10-year employment agreement with MSO.
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